UK Government scraps HS2 to Manchester
A pro-HS2 advert on the Manchester Metrolink tram in the lead up to the 2023 Conservative Party Conference in the city. Credit: John B Hewitt/Shutterstock
After weeks of speculation, UK Prime Minister Rishi Sunak finally announced that his government will be scrapping plans to continue phase two of its high-speed rail line from Birmingham to Manchester (HS2) during a speech at the Conservative Party Conference.
Many in the Rail sector have condemned the decision, with the Railway Industry Association (RIA) describing the decision as “unnecessary” and saying it “squanders the full benefits of Phase 1” of the project.
RIA CEO Darren Caplan said: “Today’s nuclear option is defeatist and sends a terrible signal to potential overseas investors that the UK simply cannot deliver large national transport infrastructure schemes.”
Manchester Mayor Andy Burnham was not only angry about the cancelled leg of the major project but also at the communication between the central government and the region’s leaders.
“It has been a highly frustrating week for us," said Burnham. "It cannot be right that a project we’ve worked on together – we’ve been at this for 15 years – is scrapped."
DB Cargo UK reveals traincrew job cuts
Rail freight company DB Cargo UK has announced that it will be cutting 95 traincrew roles as it seeks to address rising costs and loss of business.
A letter from CEO Andrea Rossi informed staff that the company had entered into consultation with the ASLEF union over reductions, due to a “surplus of driver resource” thanks to a 25% reduction in the number of trains being run by the company.
The company said that around 20 of the cuts would come through natural attrition and it hoped the other 75 roles would be reduced through voluntary redundancy in the first instance.
In addition to losing business to competitors and exiting unprofitable contracts, Rossi blamed the company’s rising costs on external issues such as the war in Ukraine and its impact on energy prices and the cost of parts and materials.
UK Government reverses ticket office closure plans
The UK Government has told train operators to withdraw proposals to close almost all ticket offices in England after two watchdog groups objected to the plans.
Transport Secretary Mark Harper said that the government had made it clear to the operators that the proposal would have to meet a high threshold for benefiting passengers, which he said has not been met.
The controversial plans had originally been proposed as a response to the supposed declining use of ticket offices in favour of ticketing apps or self-service machines at stations.
Many accessibility groups had said the closure of nearly all offices would make it harder for some people to travel on the rail network.
Moody’s lowers Alstom’s outlook rating to negative
Credit rating agency Moody’s Investors Service has lowered its credit outlook for rolling stock manufacturer Alstom from stable to negative after the company reported a negative cash flow and suffered its biggest share drop in over two decades.
Moody’s, which also confirmed Alstom’s Baa3 issuer rating, said that its change in outlook reflected the significant difference from projections on the company’s free cash flow (FCF) and was also informed by the manufacturer’s “limited track record in recovering its operating and cash flow performance” since it bought Bombardier Transportation in 2021.
The French company saw a 35% drop in shares after reporting a negative cash flow range between €500m ($530m) to €750m ($795m) in its first half (H1) results for 2023, attributing it to tight supply chain conditions and a “steep acceleration of production”.
Moody’s decisions to downgrade ratings for the companies it tracks are based on a series of factors, including if its adjusted EBITA margin remains sustained below 5%, adjusted leverage does not trend towards 3.75x over the next 12 months and adjusted FCF remains negative on a sustained basis.
ÖBB set to acquire Go-Ahead's Germany rail business
Public transport company Go-Ahead Group has agreed to sell its rail business in Germany to ÖBB, allowing the Austrian rail company to enter the regional rail passenger business in the country.
Expected to close by the end of the year, the deal will see Go-Ahead Verkehrsgesellschaft Deutschland [Go-Ahead Germany] continue operating as an independent company for its three rail contracts in Baden-Württemberg and Bavaria.
Founded in 2014, Go-Ahead Germany operates 144 EMU trains across its services on the Stuttgart and Baden-Württemberg network, the Allgäu electronic network between Munich and Lindau and the Augsburg to Munich, Würzburg, Aalen and Ulm in Bavaria.
ÖBB’s investment into the German passenger rail market follows its partnership with Deutsche Bahn on cross-border services between Germany and Austria, which recently expanded its InterCity Express timetable and night services.